Vectren plans to retire most coal-burning units, shift mix of power sources

In the latest move by an Indiana utility to reduce its use of coal, Vectren Corp. plans to retire all but one coal-burning generating unit by 2024, build a 50-megawatt solar farm and substantially increase the use of natural gas as a fuel source.

The Evansville-based company said this week it will file a detailed plan by Dec. 16 with Indiana utility regulators, but a preliminary outline shows the utility will retire its A.B. Brown plant in Posey County and half of its F.B. Culley plant in Warrick County in 2024. Vectren also plans in 2020 to end its joint operations of a unit at another Warrick County generator, which it co-owns with Alcoa. All of the units are in southern Indiana.

“We would anticipate still having some reliance on coal-fired generation, albeit substantially less, which will in turn lower the carbon footprint of our generation portfolio,” Carl Chapman, Vectren’s chairman and CEO, said in a statement.

It’s unclear how much the transition would cost, or how much it would affect customers’ bills.

All of the retiring units are at least 30 years old. The A.B. Brown units went into service in 1979 and 1986, while the Culley unit went into service in 1966. That would leave Vectren operating just one coal-fired operation, Unit 3 of the Culley Plant, which went into service in 1973.

As a result, the company said it wants to shift its mix of fuel sources between 2015 and 2036, which would cut its coal baseload from 68 percent to 16 percent. Dependence on natural gas would climb from 17 percent to 63 percent. Renewables would edge up from 6 percent to 8 percent, while energy efficiency would grow from 8 percent to 11 percent.

Around Indiana and the nation, other utilities are retiring aging coal-fired units, as coal is becoming less competitive economically with natural gas. Coal also has come under pressure from the federal government, which has mandated that utilities reduce pollution and often has required multimillion-dollar upgrades to old units.

Earlier this year, Indianapolis Power and Light Co. stopped using coal at two other plants—Harding Street in Indianapolis and Eagle Valley in Martinsville — in favor of natural gas. Earlier this month, Merrillville-based NIPSCO said it planned to retire coal-fired units at Bailly Generating Station in Chesterton and two coal-fired units at the R.M. Scchahfer Generating Station near Wheatfield.

The coal industry has fought back, but the trend seems clear that utilities are favoring other fuel sources over coming decades.

Some environmentalists, meanwhile, are applauding Vectren’s plans, at least in part.

“We are grateful for the coal retirements and believe it shows the inevitability of coal's decline in Indiana,” said Jodi Perras, chair of the Sierra Club’s Beyond Coal Campaign in Indiana. “We also believe Vectren is not being visionary enough in its plan. The dash to gas is troubling given its risks and volatility. They need more investments in solar, wind, energy efficiency and battery storage. When they redo this plan in three years, we'll be pushing for that 21st century vision.”

Kerwin Olson, executive director of Citizens Actions Coalition, an Indiana utility watchdog, said Vectren’s plan doesn’t go far enough. He said the company is only lowering its reliance on fossil fuels from 85 percent to 79 percent in coming decades.

“This is not change,” he said. “It is the status quo with an eye to the past and not the future. And clearly Vectren has absolutely no concern about climate change and the sustainability of our planet. They can and should do more.”

Vectren delivers electricity to approximately 144,000 customers in all or portions of Gibson, Dubois, Pike, Posey, Spencer, Vanderburgh and Warrick counties.